:00:00. > :00:26.Macro HARDtalk. Welcome to a special edition from Saudi Arabia with me,
:00:27. > :00:29.Stephen Sackur. I have come to one of the world 's biggest construction
:00:30. > :00:36.projects, King Abdullah Economic City. It is projected to be home to
:00:37. > :00:42.2 million people, a global city here in the kingdom of Saudi Arabia. My
:00:43. > :01:02.guess is the CEO of this place, Fahd Al-Rasheed. -- guest. Good his dream
:01:03. > :01:07.be about to turn to gust? -- could -- dust.
:01:08. > :01:14.Fahd Al-Rasheed, welcome to HARDtalk. Thank you for inviting me
:01:15. > :01:27.onto this extraordinary project. Tell me, how do you feel every day
:01:28. > :01:31.when you come on to what must be one of the biggest building sites in the
:01:32. > :01:35.world? It is wonderful. I get a rush every time I am here. How quickly
:01:36. > :01:39.are things happening? When the visitors come, they see the big
:01:40. > :01:44.stuff. I see the small stuff, a little bit of concrete poured here,
:01:45. > :01:48.a little piece of law. I see everything. It's important to give
:01:49. > :01:53.people a sense of the scale of this. It's a city that is going to be the
:01:54. > :01:59.same size as Washington, DC. You say it will have 2 million residents. It
:02:00. > :02:07.is extraordinary to build that from scratch? Absolutely. At the moment,
:02:08. > :02:10.65% of our population is under 30. Because of population migration, we
:02:11. > :02:14.have some of the fastest growing cities in the world. We need more
:02:15. > :02:18.urban centres like this. We get people to move here by offering
:02:19. > :02:23.jobs. It seems to me that when history was hatched, Saudi Arabia
:02:24. > :02:27.was the dominant player in the oil market in the oil price was going
:02:28. > :02:35.up. There was a sense that Saudi Arabia could do anything it wanted.
:02:36. > :02:45.Things are very different now? King Abdullah Economic City, when it was
:02:46. > :02:51.launched ten years ago, the idea was to prepare for a time like this when
:02:52. > :02:56.oil prices were not so high. We are here. Despite all of the economic
:02:57. > :03:03.news about oil prices and the economy of Saudi Arabia, we have
:03:04. > :03:08.signed up 23 new companies in 2015. When you talk about being an
:03:09. > :03:12.international hub, you have to persuade people that Saudi Arabia is
:03:13. > :03:17.a great place to do business. I'm not sure the wild really believe
:03:18. > :03:21.that right now. It is a great place to do business, it is more of an
:03:22. > :03:29.image. In the US, it takes six years to get the permit for a
:03:30. > :03:33.construction. Here it takes three weeks, and if it takes any longer,
:03:34. > :03:38.we complain. What you think is the biggest priority? You have talked
:03:39. > :03:43.about a port which you believe will be one of the biggest ports in the
:03:44. > :03:48.world. There is also talk of and industrial base. What is the biggest
:03:49. > :03:52.selling point? The first year we will focus on global logistics and
:03:53. > :03:56.manufacturing. The port we build will be one of the largest in the
:03:57. > :04:00.world and the biggest in the Red Sea by this year. We have 120 companies
:04:01. > :04:05.from around the world, so we know how it works and it will continue to
:04:06. > :04:13.the future. We are focusing on the retention sector, tourism and
:04:14. > :04:18.education. You think Saudi Arabia is going to be a magnet for tourists? I
:04:19. > :04:22.am confident. Our numbers show we will have 1 million people by 2020
:04:23. > :04:40.and three and three and a half million by 2025. Way? An interesting
:04:41. > :04:46.question. -- Why? The government intends on doubling the number in
:04:47. > :04:50.the next five years. You have laid out some of the vision, let's go to
:04:51. > :04:58.your office and perhaps we can challenge you a little bit more.
:04:59. > :05:03.Saudi Arabia is entering an age of austerity. It seems to me this
:05:04. > :05:11.extraordinary project is about extravagance? I think it is about
:05:12. > :05:17.fundamentals. If you see what we've built, everything we've built is
:05:18. > :05:27.what Saudi Arabia or the region needs. Infrastructure, industry, we
:05:28. > :05:30.have two build 4 million housing units in the country in the next ten
:05:31. > :05:34.years. We are looking at the potential of the country. Think back
:05:35. > :05:38.to when the project was conceived. It was a different era, talking
:05:39. > :05:46.about 2005. King Abdullah was on the throne. Saudi Arabia could be
:05:47. > :05:49.guaranteed to be the dominant oil producer in the world for ever in
:05:50. > :05:57.the world would always be reliant on Saudi Arabian oil. That is not true
:05:58. > :06:03.today and it changes everything? The government wanted to create a new
:06:04. > :06:12.era of development in the private sector. I think that the KAEC was
:06:13. > :06:16.launched for this exact moment, when the government can do everything and
:06:17. > :06:20.the government needs to rely on the private sector. I think it's
:06:21. > :06:24.working. You can't divorce yourself from the economic picture of the
:06:25. > :06:27.country as a whole. If the Saudi economy is going to slow down,
:06:28. > :06:33.fundamentally, because the oil price has plummeted, it doesn't look like
:06:34. > :06:41.it is going to rise anytime soon. Then you have a problem. I don't
:06:42. > :06:49.mind being in the Saudi economy today. You sit in the middle of a
:06:50. > :06:56.region that is full of turbulence, turmoil, war and uncertainty about
:06:57. > :07:02.the future. That is also a terrible problem. I think that people forget
:07:03. > :07:08.that the Middle East have had challenges for the past few years.
:07:09. > :07:15.The war in the 1980s between Iraq and around, with the US in the
:07:16. > :07:21.1990s. The second Gulf War in 2000 and the Arab Spring. We are kind of
:07:22. > :07:24.use to it -- KAEC. Saudi Arabia has been stable throughout all of it.
:07:25. > :07:30.You've been in the country, you've seen it. Does this look to you like
:07:31. > :07:35.a country in turmoil? I have talked to a lot of people who talk about
:07:36. > :07:38.uncertainty and challenges facing the kingdom unlike any they have
:07:39. > :07:44.seen before. It comes back to the point about whether investors will
:07:45. > :07:50.see this as the time to get involved with a speculative venture such as
:07:51. > :07:57.this? I think what you are seeing today is a different era for Saudi
:07:58. > :08:01.Arabia. It will see reform, a restructuring of the economy. I
:08:02. > :08:05.think what people are most worried about is the pace of change. We are
:08:06. > :08:12.seeing a dynamic government that is willing to take the hard decisions.
:08:13. > :08:15.What used to take 12 months is taking one month to get done. I
:08:16. > :08:22.think we are just not used to this pace of change, internally or
:08:23. > :08:25.externally. You say this is a private-sector project, but there
:08:26. > :08:31.have been several occasions, such as in 2008 with the DSE and in 2011,
:08:32. > :08:34.when you have had to go to your government and plead for emergency
:08:35. > :08:39.loans because you were running out of cash? This is what is called a
:08:40. > :08:50.public-private partnership. You cannot build a city without the
:08:51. > :08:54.government. No project of this scale can work without working with the
:08:55. > :09:03.government. If I may say so, that is exactly the point. This is a leaked
:09:04. > :09:06.memo from King Salman's office. It is marked highly confidential. It
:09:07. > :09:12.gives strict instructions for the stopping of all new projects for all
:09:13. > :09:16.public sector purchasers, including new vehicles and other equipment.
:09:17. > :09:22.That is the mindset of the government today, a government that
:09:23. > :09:28.you ultimately rely on. I think that today, if you look at the private
:09:29. > :09:34.sector, despite all of the challenges, we have signed 23
:09:35. > :09:40.companies. Our residential figures are healthy. In the first ten years
:09:41. > :09:46.we developed 30 projects. Our projects for the next ten years are
:09:47. > :09:52.137. Numbers prove it, it's not about... You like numbers, here is
:09:53. > :09:56.another one. The marine traffic index that I looked out for November
:09:57. > :10:00.of last year, it showed that on any given day, you have an average of
:10:01. > :10:08.three or four vessels in port, whereas the port Jeter, just down
:10:09. > :10:17.the coast from us, that had 44 vessels in port with another 42 en
:10:18. > :10:23.route. Then if you go to the UAE, they are also much busier than your
:10:24. > :10:28.new port. These numbers don't show the potential of our port. We have a
:10:29. > :10:34.3 million container port today, aiming to be over for by the end of
:10:35. > :10:38.the year. We have a number of the top shipping lines, I am very
:10:39. > :10:47.confident about the future to make this one of the top 20 ports in the
:10:48. > :10:55.world. Lets switch focus to the political, cultural climate in Saudi
:10:56. > :10:57.Arabia and in Yoreli new city. Is your biggest problem that the
:10:58. > :11:04.outside world's perceptional Saudi Arabia is that it is deeply
:11:05. > :11:10.conservative and repressive? That is not in our sphere in which people
:11:11. > :11:18.want to invest, live, or establish new lives. I think that is the wrong
:11:19. > :11:24.picture. I think Saudi Arabia has been seen with a static lands. I see
:11:25. > :11:30.a dynamic Saudi Arabia, it is changing quite rapidly. I don't
:11:31. > :11:38.think we in the country understand the pace of change. Talking about
:11:39. > :11:42.women, ten years ago there was no woman allowed on board, you could
:11:43. > :11:47.not be a CEO. He could not be in Parliament. All of this change very
:11:48. > :11:53.rapidly. Today, 20% of our counsellors are women. That was a
:11:54. > :11:57.bit of a showpiece collection. It doesn't indicate real fundamental
:11:58. > :12:03.change. Friendly, the biggest change of all would be if my female
:12:04. > :12:06.colleagues on this same programme were able to come to your city and
:12:07. > :12:10.drive themselves here, but that is not possible because you cannot
:12:11. > :12:14.separate yourself from the deep conservatism in this country. I
:12:15. > :12:21.think to say that elections that have been held, women have been
:12:22. > :12:29.elected... Local council elections, this is nothing to do with who holds
:12:30. > :12:33.real power. It is progress. There are more graduating women than men
:12:34. > :12:38.from college. The world does not understand Saudi Arabia easily. I
:12:39. > :12:42.would put it to you that you are a very particular kind of Saudi
:12:43. > :12:47.Arabian. You are educated in the United States, you have been to
:12:48. > :12:51.business school. You are open-minded and you are not representative of
:12:52. > :12:56.the religious establishment in this country and not of the mindset of
:12:57. > :13:02.the ruling family. I don't think I am representative of anyone but
:13:03. > :13:08.myself. Saudi Arabia is a zero one form of person, we are very
:13:09. > :13:12.different. Talking about people who are graduating from the US, there
:13:13. > :13:16.are 160,000 graduating youth. They will change the country
:13:17. > :13:22.fundamentally. Talking about change, let's be specific. You are
:13:23. > :13:28.telling international investors to come and live here, to make this
:13:29. > :13:33.place their future. Will there be a presence of the religious police
:13:34. > :13:37.here? I don't think that's the issue. It's an important issue. A
:13:38. > :13:41.talented young businesswoman, she wants to come here as part of a team
:13:42. > :13:46.establishing a new company. She wants to believe she will have a
:13:47. > :13:50.good life. Will she be able to integrate herself from the rules
:13:51. > :13:55.that govern life in Riyadh, for example. Can she do the things that
:13:56. > :14:01.she would do if she lived in the United States or Europe? You need to
:14:02. > :14:09.remember that we are still in Saudi Arabia, Saudi Arabia today is very
:14:10. > :14:15.dynamic. We are struggling between modernity and tradition. We have the
:14:16. > :14:21.highest use of social media today in the world per capita. I don't know
:14:22. > :14:23.what the country will look like in 30 or 40 years. What would you like
:14:24. > :14:36.it to look like. I think we will have a lot of
:14:37. > :14:41.youthful energy coming back into the country, women will take a stronger
:14:42. > :14:49.place in society. But what it means to be Saudi is still not clear,
:14:50. > :14:53.because we are, we have a different strata of people on income, on
:14:54. > :14:58.religion. 30% of the population is not Saudi. So the country itself is
:14:59. > :15:04.a young country and what it will look like in the future will be the
:15:05. > :15:07.dynamism. Think maybe you are being a bit diplomatic, a little tactful,
:15:08. > :15:13.but is your message to the rulers of this kingdom that they need to
:15:14. > :15:18.accept change? I think they are leading change, to be honest with
:15:19. > :15:23.you. Really? Hang on, you often say in public, we are going to be an
:15:24. > :15:27.island of change. We are going to bring the world to Saudi Arabia and
:15:28. > :15:34.Saudi Arabia to the world, and you compare yourselves here in this new
:15:35. > :15:39.city to do by. But in Dubai, the authorities there have accepted all
:15:40. > :15:44.sorts of different lifestyles. They have attracted Western money,
:15:45. > :15:48.Western tourists, Western business people, because they have been so
:15:49. > :15:55.flexible. Are you telling me that you can achieve that here? Well,
:15:56. > :16:00.Dubai is different because it has to attract people from all around the
:16:01. > :16:03.world. Producer you want to do that? We do, we want to attract foreign
:16:04. > :16:08.direct investment, and we have done so. But my point is, we have huge
:16:09. > :16:14.potential in the country, huge needs in the country for the Saudi
:16:15. > :16:20.population. We don't need to attract people and tourism here, these are
:16:21. > :16:25.not the same people that go to Dubai. We will have about 30 million
:16:26. > :16:28.visitors who are already coming. They have visas and they want a
:16:29. > :16:36.Conservative, family-oriented approach. That is exactly what we
:16:37. > :16:39.are going to do. The other targets are Saudis themselves. They also
:16:40. > :16:45.need a destination, so we will build zoos, golf courses, theme parks,
:16:46. > :16:50.hotels, for those people. But you will do it in the Saudi way, in a
:16:51. > :16:56.traditional way. I hope so, we have two. You are in Saudi Arabia, this
:16:57. > :17:00.is a sense of place. On the golf course that you will build here,
:17:01. > :17:06.will women and men be able to play together? Definitely, why not? I
:17:07. > :17:12.know it is difficult for women to play golf in this country, partly
:17:13. > :17:16.because of the clothing laws. We will figure that out, we are
:17:17. > :17:20.building a new industry. Again, it is not about tactics, it is about
:17:21. > :17:24.the direction. How can we create a new place in Saudi Arabia that is
:17:25. > :17:29.respectful of the Saudi tradition, but at the same time is modern and
:17:30. > :17:37.reflects the local needs and target markets. One of the key points made
:17:38. > :17:43.by the Deputy Crown prince as he delivers what he calls his economic
:17:44. > :17:46.transformation model, is to ensure that more jobs are done by Saudis
:17:47. > :17:50.and fewer jobs are done by foreigners in Saudi Arabia. I think
:17:51. > :17:56.construction is one area that he has been looking at. You have taken me
:17:57. > :17:59.on a quick tour of construction, there is a lot going on, but I did
:18:00. > :18:04.notice a lot of the workers I saw were not Saudis. Will that change? I
:18:05. > :18:07.think the challenge with this is that we have opened our economy
:18:08. > :18:15.unlike most countries in the world too expensive workers. They get paid
:18:16. > :18:18.an amount of money that is reflective of their economic
:18:19. > :18:23.opportunity of their country. That is below what a Saudi would make.
:18:24. > :18:28.That is a challenge. We are going to change that overtime by training
:18:29. > :18:33.Saudis, they are now accepting jobs that they use do not accept. To be
:18:34. > :18:39.honest with you. You can look at our port operations, they are many
:18:40. > :18:44.people from villages around us, and it took a long time to train them.
:18:45. > :18:48.We are big believers that Saudis who are trained properly and help to get
:18:49. > :18:53.a job will actually do it. It is partly about the mindset, isn't it?
:18:54. > :18:59.You are telling us that you believe Saudis in King Abdullah economic
:19:00. > :19:02.city will be able to do the construction work, the garbage
:19:03. > :19:09.collection, some of the most basic labouring tasks which for decades in
:19:10. > :19:15.this country have been done by overseas expatriate workers? I don't
:19:16. > :19:20.see why not. Have you told this to your Saudi neighbours? It seems like
:19:21. > :19:24.this is not a society right now that accept that. Despite the austerity
:19:25. > :19:29.the government is talking about you still get huge subsidies, you live
:19:30. > :19:32.off oil resources, and I don't think most Saudis feel or see the need to
:19:33. > :19:37.do the kinds of jobs you are talking about. I think this is a
:19:38. > :19:40.generalisation. I understand where it is coming from, but I know a lot
:19:41. > :19:44.of Saudis who are willing to do any job. We see them everyday, we train
:19:45. > :19:49.them, by the way, Saudis from the villages around us. Go to the
:19:50. > :19:53.hotels, you will see them working in different jobs. It is all about the
:19:54. > :19:56.environment you offer. If you offer the right environment and select
:19:57. > :19:59.properly, you will see them doing their jobs. What about
:20:00. > :20:04.sustainability? We haven't talked about that. It is an extraordinary
:20:05. > :20:07.view here, because essentially beyond the fancy housing complex in
:20:08. > :20:17.this beautiful office headquarters, you have desert. It does seem odd in
:20:18. > :20:22.a building a vast new city in the middle the desert, adding goodness
:20:23. > :20:26.knows how much carbon emissions to the atmosphere, when the world's
:20:27. > :20:29.governments have just pledged themselves to decarbonising the
:20:30. > :20:35.world economy. How are you going to justify this project? Actually, we
:20:36. > :20:42.are very careful when it comes to building sustainable it. When this
:20:43. > :20:46.project was launched ten years ago, it looked like Venice. It was
:20:47. > :20:51.beautiful, but had nothing to do with the environment in which we
:20:52. > :20:59.exist. Then I was in New York, during Hurricane Sandy, and assure
:21:00. > :21:06.the gas back -- I sought the full power of nature and what it can do
:21:07. > :21:12.if you try to concrete over the natural area. I came back and said,
:21:13. > :21:17.this will not work. We allowed water to flow were it wanted to, and
:21:18. > :21:21.focused on conservation a lot. I think conservation is the most
:21:22. > :21:28.important form of sustainability, so that will cut 40% of our carbon use
:21:29. > :21:36.if we just focus on this area. Now we are saying that the world is
:21:37. > :21:40.changing. We just agreed that the mass of land that we have, although
:21:41. > :21:47.it is probably the most modern, should be scrapped. I don't know yet
:21:48. > :21:51.how the internet of things, the driverless cars, the sharing
:21:52. > :21:55.economy, will change the way our city should look. I think we are
:21:56. > :22:00.building great cities today, but they are not Houthi first century
:22:01. > :22:04.cities. We still don't understand where 21st century cities should
:22:05. > :22:10.look like. So you just scrapped your master plan? Does that mean you have
:22:11. > :22:14.no plan at all? No, I prefer this. It should not be so exact about what
:22:15. > :22:18.to do, it should tell you what not to do. Just coming back to this
:22:19. > :22:22.point about how you reduce emissions and make it as close to carbon
:22:23. > :22:26.neutral as you can, I was expecting, given that we are here in Saudi
:22:27. > :22:34.Arabia, where the sun is pretty much always shining, I was expecting to
:22:35. > :22:38.see vast solar arrays to power this place, but I don't see any
:22:39. > :22:45.investment in solar at. Solo on its own is very effective, but not when
:22:46. > :22:49.it is not coupled with storage. So, how new houses will not only have
:22:50. > :22:54.solar panels, but they will have batteries as well. That is the idea
:22:55. > :22:58.about it. That is not showing you -- it is not about showing you a nice
:22:59. > :23:05.area with lots of solar panels, it is about number one, conserve, so
:23:06. > :23:11.don't use what you don't need, and secondly, being sustainable
:23:12. > :23:15.economically and ecologically. King Abdullah talked of six new economic
:23:16. > :23:18.cities for Saudi Arabia. You are still going. There are one or two
:23:19. > :23:23.others that are still staggering along, but a lot of the planning has
:23:24. > :23:27.been shelved. You may be the last one standing, and you might not make
:23:28. > :23:30.it either. I believe we will make it, first of all. It is happening,
:23:31. > :23:35.so that is not a question in my mind. But building a city is not
:23:36. > :23:41.easy, I have learned this the hard way. There are 247,000 cities around
:23:42. > :23:46.the world, this is the most competitive space for a product, a
:23:47. > :23:53.city. Each city has its own path, it really needs to be zooming into why
:23:54. > :23:55.it needs to exist, and then you need committed government or private
:23:56. > :24:04.sector developers to make it happen despite the challenges. I think this
:24:05. > :24:09.will happen, but the others have just taken a very different path to
:24:10. > :24:10.success. I hope I can return, but for now, thank you for being on
:24:11. > :24:32.HARDtalk, Fido Fahd al Rasheed.